NEW YORK, March 5, 2019 /PRNewswire/ -- Global X Management Company LLC (Global X), the New York-based provider of exchange-traded funds (ETFs), today announced that its covered call suite of ETFs has crossed the $500 million mark for assets under management. The suite includes the Global X Nasdaq 100 Covered Call ETF (QYLD), and the Global X S&P 500 Covered Call ETF (HSPX).
Covered call strategies, like QYLD and HSPX, can be attractive to investors during times of heightened market volatility and as a potential source of income. By selling call options on the indices that the funds track, they are able to generate income in the form of the premium for investors on a monthly basis that shares little in common with more traditional sources of income. As volatility in the market has increased, the premiums received from selling call options typically increased, resulting in higher income.
"After a protracted period of low volatility and strong market returns, particularly within the US, investors face a more uncertain market outlook," said Rohan Reddy, research analyst at Global X. "We've seen investors gravitate towards these funds as volatility picks up and they look for strategies that may generate income and manage potential downtrends."
QYLD and HSPX became reorganized under the Global X ETFs brand and trust in December 2018. Since then, the two have brought in a combined $42 million in net new assets.i
ABOUT GLOBAL X
Seeking to provide access to high-quality and cost-efficient investment solutions, Global X is a New York-based sponsor of exchange-traded funds (ETFs). Founded in 2008, we are distinguished by our thematic growth, income, core, international access, commodities, alpha, and risk management suites of ETFs and have more than 60 funds available across U.S. and foreign exchanges. Global X is recognized as a leader in providing intelligent investment solutions for our clients.
There are risks involved with investing, including possible loss of principal. Concentration in a particular industry or sector will subject the Funds to loss due to adverse occurrences that may affect that industry or sector. Investors should be willing to accept a high degree of volatility in the price of the fund's shares and the possibility of significant losses.
The Funds engage in options trading. An option is a contract sold by one party to another that gives the buyer the right, but not the obligation, to buy (call) or sell (put) a stock at an agreed upon price within a certain period or on a specific date. A covered call option involves holding a long position in a particular asset, in this case U.S. common equities, and writing a call option on that same asset with the goal of realizing additional income from the option premium.By selling covered call options, the fund limits its opportunity to profit from an increase in the price of the underlying index above the exercise price, but continues to bear the risk of a decline in the index. A liquid market may not exist for options held by the fund. While the fund receives premiums for writing the call options, the price it realizes from the exercise of an option could be substantially below the indices current market price. QYLD is non-diversified.
Shares of ETFs are bought and sold at market price (not NAV) and are not individually redeemed from the Fund. Brokerage commissions will reduce returns.
Carefully consider the Funds' investment objectives, risk factors, charges, and expenses before investing. This and additional information can be found in the Funds' summary and full prospectuses, which may be obtained by calling 1-888-GX-FUND-1 (1-888-493-8631), or by visiting http://www.globalxfunds.com/. Read the prospectus carefully before investing.
Global X Management Company LLC serves as an advisor to Global X Funds. The Funds are distributed by SEI Investments Distribution Co. (SIDCO), which is not affiliated with Global X Management Company LLC. Global X Funds are not sponsored, endorsed, issued, sold or promoted by CBOE, nor does CBOE make any representations regarding the advisability of investing in the Global X Funds. Neither SIDCO nor Global X is affiliated with CBOE.
i Source: ETF.com. Data from 12/25/2018 to 3/1/2019